For all the talk of mixed-ownership reform in China, the state's presence in the economy is as strong as ever.

Deleveraging is Beijing's top economic focus right now so you might imagine that companies raising equity to replace debt would be music to regulator's ears. But the queue for initial public offerings remains long, with 544 companies still awaiting approval. By comparison, the China Securities Regulatory Commission processed only 453 cases so far this year. If it's difficult for U.S. companies to time IPOs, it's impossible for their Chinese peers.

As of the end of May, Chinese companies had raised $14.4 billion of capital through IPOs, compared with $22 billion for the whole of 2016. The amount is little more than 1 percent of the $1 trillion raised in the corporate bond market in the first five months.

No IPO Buzz

Regulatory roadblocks are restraining China Inc. from raising equity on public markets

Source: Bloomberg

To be sure, there is some evidence that the CSRC is doing more quality control. The regulator has denied or delayed 58 IPO applications in 2017, the most in recent years. (The approval rate remains elevated at 90 percent, however.)

More Quality Control?

CSRC has denied or delayed more IPO applications this year

Source: CSRC

The situation is more opaque if we move to the corporate bond side, where we have not just one, but three regulators: namely the People's Bank of China, the National Development and Reform Commission and the CSRC. Here, there's no IPO line to tell us which company can get the nod from regulators and which can't.

All we know is that the deleveraging mandate is being strongly felt. Non-financial companies managed to sell only $1.8 trillion of corporate bonds so far this year, well short of the $4 trillion raised in 2016.

Onshore Bonds Cooling

China is limiting onshore corporate bond issues in 2017

Source: Bloomberg

Note: 2017 data as of the first week of August

Even if a company wants to market dollar debt to offshore investors, it needs NDRC approval. And no one knows which way the political wind is blowing at the planning agency.

For a good part of the year, markets speculated that the commission had stopped all high-yield real estate developers from selling new bonds overseas, prompting them to issue expensive 364-day notes that don't require approval.

But here's the odd part: Last week, Sunac Corp., now the most indebted developer after buying assets from Dalian Wanda Group Co., issued $1 billion of dollar bonds in Hong Kong. So Sunac must have got NDRC approval then? We can't tell from the commission's website: The latest approval shown there is dated July 27.

Policy clarity may need to wait until this fall's Communist Party Congress, when President Xi Jinping will reshuffle his cabinet. Until then, expect more confusion in the primary markets.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.